The U.S. Dairy Exporter Blog: Market Analysis, Research & News

  • Milk Powder Moves South of the Border

    By Alan Levitt December 7, 2015

    Nearly one-third of total U.S. dairy exports in October went to Mexico.

    Record exports of nonfat dry milk/skim milk powder (NDM/SMP) to Mexico highlighted otherwise weaker U.S. export numbers in October.

    Mexico-125-155965-edited

    Exporters moved 48,812 tons of NDM/SMP in October, the most in five months, and up 29 percent from a year ago. This brought the year-to-date total to 470,934 tons, slightly ahead of last year’s pace. More than half of October sales went to Mexico (28,537 tons—the most ever). October marked the second straight month of record powder shipments south of the border. For the year, U.S. NDM/SMP exports to Mexico are 207,174 tons, up 26 percent and already more than all of last year. In fact, U.S. powder exports to Mexico are equivalent to more than 1.4 million tons (3.1 billion lbs.) of milk, about 1.8 percent of the U.S. milk supply.

    Chart10

    Significantly, U.S. suppliers cleared 70 percent of NDM/SMP production overseas in September and October, leading to a 21 percent (22,000 ton) reduction in NDM inventories in the two month period.

    Robust sales to Mexico offset declines in sales elsewhere; NDM/SMP exports to all other regions were down 20 percent from last year, including a 32-percent drop-off in exports to Southeast Asia.

    Most other categories sustained the trends of prior months.

    Cheese exports were 23,616 tons, down 10 percent from last year. Volume has now trailed year-ago levels for 13 straight months. Shipments to Mexico were up 26 percent, but this was more than offset by significant declines in sales to South Korea (-54 percent) and Japan (-46 percent).

    Whey exports remain light. Exports of dry, sweet whey were just 12,107 tons, down 34 percent from last year. Shipments of whey protein concentrate were down 9 percent and whey protein isolate were down 22 percent. Throughout the whey complex, sales to almost every major customer were down, led by a 23 percent drop in total whey sales to China.

    Butterfat exports were just 852 tons in October, only slightly more than the previous month’s six-year-low volume. For the year, butterfat exports are on track to finish with their lowest total since 2006. Among other products, October exports of lactose (-12 percent), milk protein concentrate (-38 percent) and whole milk powder (-10 percent) trailed year-ago levels.

    In total, U.S. suppliers shipped 147,048 tons of milk powders, cheese, butterfat, whey and lactose in October, down 4 percent from a year ago and down 5 percent from September (daily-average basis). Total overseas sales were valued at $407 million, down 21 percent from last year, and down 1 percent from September (daily average).

    Mexico expanded its lead as the top U.S. customer. In October, the value of U.S. exports to Mexico was up 5 percent, and Mexico represented 29 percent of total U.S. exports. Meanwhile, exports to Southeast Asia were down 45 percent compared with last October, while shipments to China (-35 percent), the Middle East/North Africa region (-20 percent), South Korea (-52 percent) and Japan (-39 percent) continued lower.

    Chart14-931584-edited

    To use interactive charts with current and historical trade data, see usdec.org's page on U.S. export data.

    To download a printable pdf summary of the October trade data, click here.

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    The U.S. Dairy Export Council fosters collaborative industry partnerships with processors, trading companies and others to enhance global demand for U.S. dairy products and ingredients. USDEC is primarily supported by Dairy Management Inc. through the dairy farmer checkoff. How to republish this post. 

     

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